Can we end Child Poverty?

Lots of people think that poverty is inevitable and that it is something that we just have to learn to accept in today’s world. But there are numerous examples of countries across the world that have low levels of child poverty, in comparison with ours. For example the child poverty rate in Denmark (9%) is much lower than it is in Romania (33%), and Slovenia (11%) and Cyprus (13%) have much lower levels of child poverty than the UK, despite having smaller economies[1]. The USA, the world’s largest economy, has a high level of child poverty at 21%. [2]

In 1979 when the Conservatives took office, child poverty affected 13% of children in the UK. By 1997, when they left office, the figure was up to 29%.[3] This suggests that poverty could be a result of political and economic decisions.[4] If child poverty can increase as a result of political decisions, then we must be able to reduce it by political decisions as well.

It has been estimated that ending child poverty by increasing benefits and tax credits alone would cost the government around £28 billion per year.[5] However, if other issues were addressed such as low pay, unequal pay for women, the high cost of childcare and improved education, the cost would be a lot less to the government. Remember that 55% of children in poverty have a parent in work and the cost of childcare often prevents women from looking for work.[6]

£28 billion is a lot of money, but when you remember that it has also been estimated that child poverty costs the UK £25 billion per year, the net cost to ending child poverty may be as low as around £3 billion per year – maybe even less. Here are some comparisons to show what different amounts of money can get you in the UK:

  • The GDP of the UK is estimated to be approx £2.250 trillion[7]
  • The Premier League wage bill for the 2009/10 season was estimated at £1.4 billion[8]
  • The Trident nuclear submarines could end up costing nearly £25 billion by the time they are built[9]
  • Her Majesty’s Revenue & Customs (HMRC) estimate that the ‘tax gap’ in the UK (the money that should be collected through taxes but isn’t) is £35 billion per year.[10]
  • Benefit fraud costs the UK approximately £1.2 – £1.5 billion per year. Benefit errors (on the part of the customer and the system) cost approximately £2.5 billion per year.[11]
  • A bonus tax on bankers in 2009 raised approx £3.5 billion. A levy on banks balance sheets raised £2.5 billion[12]
  • The Royal Bank of Scotland, largely owned by the UK government, paid their staff nearly £1 billion in bonuses in 2010.[13]

[1] The Well-Being of Children in the UK, Jonathan Bradshaw, 2011

[2] National Center for Children in Poverty. Accessed at http://www.nccp.org/topics/childpoverty.html

[3] Households Below Average Income: An analysis of the income distribution 1994/95 – 2008/09, DWP, 2010

[4] Child poverty levels also increased in the last years of the previous Labour government

[5] What will it take to end child poverty? Joseph Rowntree Foundation, 2006

[8] Annual Review of Football Finance 2010, Deloitte, 2011

[9] New Trident Fleet cost will top £25bn, The Guardian, 18 May 2011. Accessed at: http://www.guardian.co.uk/politics/2011/may/18/new-trident-fleet-funding

[10] Measuring Tax Gaps 2011, HM Revenue & Customs, 2011

[12] Banks given go-ahead to pay unlimited bonuses, The Guardian, 11 Jan 2011. Accessed at: http://www.guardian.co.uk/politics/2011/jan/10/banks-unlimited-bonuses-ministers

[13] RBS Bankers get £950 billion in bonuses despite £1.1 billion loss, The Guardian, 24 February 2011. Accessed at: http://www.guardian.co.uk/business/2011/feb/24/rbs-bankers-bonuses-despite-loss

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